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The professional networking site LinkedIn just raised $53 million in capital, which pegs the company’s valuation at around $1 billion. Technology analysts are wondering if that’s a tad high. How much social networking sites can extract from advertisers and subscribers, after all? Perhaps equally debatable is how valuable LinkedIn is to Richmond’s business community.
The site is basically an online version of a company directory crossed with a high school yearbook. Or to put it another way, It's a business version of Facebook (minus all the photos of people drinking). For the most part, it’s free to use. Users can reach out via email to people they know, hence the “network” part of the new lingo, “social networking.” Users can also leave feedback and write recommendations – the professional version of that yearbook scrawling, “Have a great summer.”
Worldwide, LinkedIn has around 23 million registered users. More than 500 Richmonders have at least 100 connections. A few dozen have 500 connections. The majority of people with triple-digit connections seem to be in marketing/advertising or recruiting.
Jamie Gaymon, an account executive for IT staffing company PLANIT Technology Group , said he’s used the site for four years. He spends around an hour a day surfing through contacts.
The site is helpful for finding new leads and doing background research, Gaymon said. “It’s a good tool. It enables you to keep a lot more information together, and use existing relationships to your advantage,” he said.
On Wednesday Gaymon used LinkedIn to connect with a fellow University of Richmond graduate whom might become a customer. “Would I have run into her at an alumni event or a football game; sure. But I was able to leverage that relationship today,” he said. “It’s faster than going through normal channels.”
Gaymon said he often sees high level executives with profiles on the site, but few local CEOs have accounts. (Marshall Morton, the CEO of Media General, however, does have a profile page with 28 connections.)
Others say the site is unhelpful. Sam Harris, a client relations manager at the Richmond hedge fund TFS Capital, joined LinkedIn three years ago because someone invited him to join via email. He has less than 10 connections.
“I personally never use it. The only time I actually ever look at it is when I get a – I’m not sure what it’s called, a LinkedIn request,” Harris said. “We’re more focused on trying to reach out to people we know are interested in our product, and those who come to us directly.”
Jeff Sadler, the former manager at Toad’s Place who now works in community development for the State of Virginia, said LinkedIn needs to add more members and reach a critical mass. “I’ve connected with a few people, but it’s still early in the development,” he said. Jeff Kelley, a former technology reporter at the Times-Dispatch who now works as an associate at Capital Results, said he prefers Facebook. "Overall I find it really complex to use, and honestly, way less fun than Facebook. I understand LinkedIn is more professional, but I've yet to really sit down and learn the ins and outs of it. It needs work on the simplicity of use side of things." BizSense's take: Perhaps the most interesting feature on the site is the recommendations. Because it’s open for all to see, including the person being critiqued, the recommendations are a sort of bizarre charade. The virtual equivalent of I scratch your back, you scratch mine. The person doing the recommending knows everyone can see his or her musings, so there’s a disincentive to write a negative review even if the person in question warrants it. That would just make you a cyber-killjoy -- or to use a ridiculous new term, cyber-bullying. Let the debate begin. Has LinkedIn helped you in business?
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I believe the key to successful LinkedIn is to make sure you only connect to people you actually know. I have seen contacts on Linked In that don’t appear to "know" a significant number of the people in their network. The rule of thumb I use is would I be willing to refer people to them or refer them to other people I know. It sounds simple, but relationship based networking is a very simple activity. I currently have about 225 LinkedIn connections and 245 Facebook connections. There is about a 66% overlap between the two groups. I find both websites useful and enjoyable, but Facebook is clearly for personal networking and LinkedIN is clearly for business networking. One suggestion, I have repeatedly emailed LinkedIN is to finally release the Blackberry interface like the ever-so-popular Facebook application that my wife and I are addicted to on a daily basis.